Detailed analysis of: Cyberspace and the American Dream: A Magna Carta for the Knowledge Age Release 1.2 // August 22, 1994 Progress and Freedom Foundation Co-authors: Ms. Esther Dyson Mr. George Gilder Dr. George Keyworth Dr. Alvin Toffler Analysis By: Richard K. Moore rkmoore@iol.ie 20 January 1995 ----------------------------------------------------- This document is a condensed version of the Magna Carta (MC), with extensive commentary. Some sections of MC, especially the introductory material, are quoted in entirety. Some sections are summarized by me, with representative passages cited. Other sections are boiled down with ellipses to their meat. Asterisks are used to add emphasis to the source text. -rkm ___________________________________________________ Cyberspace and the American Dream: A Magna Carta for the Knowledge Age Release 1.2 // August 22, 1994 ---------------------------------------- This statement represents the cumulative wisdom and innovation of many dozens of people. It is based primarily on the thoughts of four "co-authors": Ms. Esther Dyson; Mr. George Gilder; Dr. George Keyworth; and Dr. Alvin Toffler. This release 1.2 has the final "imprimatur" of no one. In the spirit of the age: It is copyrighted solely for the purpose of preventing someone else from doing so. If you have it, you can use it any way you want. However, major passages are from works copyrighted individually by the authors, used here by permission; these will be duly acknowledged in release 2.0. It is a living document. Release 2.0 will be released in October 1994. We hope you'll use it is to tell us how to make it better. Do so by: - Sending E-Mail to PFF@AOL.COM - Faxing 202/484-9326 or calling 202/484-2312 - Sending POM (plain old mail) to 1250 H. St. NW, Suite 550 Washington, DC 20005 (The Progress & Freedom Foundation is a not-for-profit research and educational organization dedicated to creating a positive vision of the future founded in the historic principles of the American idea.) ---------------------------------------- PREAMBLE The central event of the 20th century is the overthrow of matter. In technology, economics, and the politics of nations, wealth -- in the form of physical resources -- has been losing value and significance. The powers of mind are everywhere ascendant over the brute force of things. In a First Wave economy, land and farm labor are the main "factors of production." In a Second Wave economy, the land remains valuable while the "labor" becomes massified around machines and larger industries. In a Third Wave economy, the central resource -- a single word broadly encompassing data, information, images, symbols, culture, ideology, and values -- is _actionable_ knowledge. The industrial age is not fully over. In fact, classic Second Wave sectors (oil, steel, auto-production) have learned how to benefit from Third Wave technological breakthroughs -- just as the First Wave's agricultural productivity benefited exponentially from the Second Wave's farm-mechanization. But the Third Wave, and the _Knowledge Age_ it has opened, will not deliver on its potential unless it adds social and political dominance to its accelerating technological and economic strength. This means repealing Second Wave laws and retiring Second Wave attitudes. It also gives to leaders of the advanced democracies a special responsibility -- to facilitate, hasten, and explain the transition. As humankind explores this new "electronic frontier" of knowledge, it must confront again the most profound questions of how to organize itself for the common good. The meaning of freedom, structures of self- government, definition of *property*, nature of *competition*, conditions for *cooperation*, sense of community and nature of *progress* will each be redefined for the Knowledge Age -- just as they were redefined for a new age of industry some 250 years ago. What our 20th-century countrymen came to think of as the "American dream," and what resonant thinkers referred to as "the promise of American life" or "the American Idea," emerged from the turmoil of 19th- century industrialization. Now it's our turn: The knowledge revolution, and the Third Wave of historical change it powers, summon us to renew the dream and enhance the promise. THE NATURE OF CYBERSPACE The Internet -- the huge (2.2 million computers), global (135 countries), rapidly growing (10-15% a month) network that has captured the American imagination -- is only a tiny part of cyberspace. So just what is cyberspace? More ecosystem than machine, cyberspace is a bioelectronic environment that is literally universal: It exists everywhere there are telephone wires, coaxial cables, fiber-optic lines or electromagnetic waves. This environment is "inhabited" by *knowledge*, including incorrect ideas, existing in electronic form. It is connected to the physical environment by portals which *allow people to see what's inside*, to put knowledge in, to alter it, and to take knowledge out. Some of these portals are one-way (e.g. television receivers and television transmitters); others are two-way (e.g. telephones, computer modems). [ Hey! I though *we* were the residents of [ cyberspace, not the the electrons! [ [ Here's where the condensation starts. [ [ They continue building the model that cyberspace is [ a big data world that people can access. No [ perception of cyberspace *embodying* communities of [ people. People are to participate as individual [ consumer/navigator of cyberspace's resources. [ [ Here's a representative sample of the slogan- [ coating that colors their presentation: ...Cyberspace is the land of knowledge, and the exploration of that land can be a civilization's truest, highest calling. The opportunity is now before us to empower every person to pursue that calling in his or her own way. The challenge is as daunting as the opportunity is great. The Third Wave has profound implications for the nature and meaning of property, of the marketplace, of community and of individual freedom. As it emerges, it shapes new codes of behavior that move each organism and institution -- family, neighborhood, church group, company, government, nation -- inexorably beyond standardization and centralization, as well as beyond the materialist's obsession with energy, money and control. [ Next comes the first entry of the leit-motiv: [ "government" as the villain of the story. It also spells the death of the central institutional paradigm of modern life, the bureaucratic organization. (Governments, including the American government, are the last great redoubt of bureaucratic power on the face of the planet, and for them the coming change will be profound and probably traumatic.)... [ Corporations, as a seat of bureaucratic power, [ manage to escape notice here. Ah well, so many [ details, so little time... [ [ Next, they show how hip they are by pointing out [ the narrowness of the "superhighway" metaphor, and [ the aptness of the "cyberspace" [ metaphor. They break the 2nd-wave bounds of linear [ ASCII messaging to give us a brilliant two- [ dimensional table with which to compare the [ metaphors in a futuristic light: _Information Superhighway_ / _Cyberspace_ Limited Matter / Unlimited Knowledge Centralized / Decentralized Moving on a grid / Moving in space Government ownership / A vast array of ownerships Bureaucracy / Empowerment Efficient but not hospitable / Hospitable if you customize it Withstand the elements / Flow, float and fine-tune Unions and contractors / Associations and volunteers Liberation from First Wave / Liberation from Second Wave Culmination of Second Wave / Riding the Third Wave ... [ Well, OK, I buy it. I bought it ten years ago. [ [ --- [ [ The first major character in the story now makes an [ appearance. He is brother "private property", [ endowed by his creator with inalienable rights. [ Those rights are to be the very [ cornerstone of the cyberspace frontier: THE NATURE AND OWNERSHIP OF PROPERTY Clear and enforceable property rights are essential for markets to work. Defining them is a central function of government. Most of us have "known" that for a long time. But to create the new cyberspace environment is to create _new_ property -- that is, new means of creating goods (including ideas) that serve people. The property that makes up cyberspace comes in several forms: Wires, coaxial cable, computers and other "hardware"; the electromagnetic spectrum; and "intellectual property" -- the knowledge that dwells in and defines cyberspace. [ [ Cyberspace is clearly defined as being a repository [ for "knowledge property". This definition is [ summarized in their phrases: [ [ "the knowledge that dwells in and defines [ cyberspace" [ [ " to create...cyberspace...is to create _new_ [ property" [ [ They next set out a dichotomy -- we are to decide [ between two options for cyber-property ownership, [ private & public: In each of these areas, two questions that must be answered. First, what does "ownership" _mean_? What is the nature of the property itself, and what does it mean to own it? Second, once we understand what ownership means, _who_ is the owner? At the level of first principles, should ownership be public (i.e. government) or private (i.e. individuals)? ... [ Brother "private property" is asking to be accepted [ as "everyman", to be the character the reader [ identifies with. He claims to represent the [ "individual". Well... OK so far. But methinks [ Plato is entrapping me... [ [ Is it true that "public" includes no other options [ than direct government ownership? [ [ And is it true that "private" means ownership by [ individuals? [ And if so, is that all individuals, or a few [ individuals? [ The unfolding story will make this clear. [ [ --- [ [ They make one really ominous statement in this [ section: If this analysis is correct, copyright and patent protection of knowledge (or at least many forms of it) may no longer be unnecessary... [ That word "knowledge" is scary in this context. Do [ they mean that ideas and facts are to be [ patentable? We see such a trend [ in genetic engineering already. [ [ In the cyberspace context, are they proposing that [ intellectual concepts themselves will be [ patentable? If so, then presumably it will happen [ on a wholesale basis. [ Will schools pay knowledge royalties to teach the [ three R's? [ [ --- [ [ Their next section is entitled "THE NATURE OF THE [ MARKETPLACE". I'll pass most of it along, trimmed [ by a few ellipses and punctuated by asterisks: THE NATURE OF THE MARKETPLACE Inexpensive knowledge destroys economies-of-scale. Customized knowledge permits"just in time" production for an ever rising number of *goods*. Technological progress creates new means of serving old markets, turning *one-time monopolies* into *competitive battlegrounds*. These phenomena are altering the nature of the marketplace, ...transformed by technological progress from a "*natural monopoly*" to one in which competition is the rule. Three recent examples: * The market for "mail" has been made competitive by the development of fax machines and overnight delivery ...During the past 20 years, the market for television has been transformed from ... a few broadcast TV stations to one in which consumers can choose among broadcast, cable and satellite services. * The market for local telephone services, until recently a monopoly..., is rapidly being made competitive by the advent of wireless service and the entry of cable television into voice communication... The advent of new technology and new products creates the potential for _dynamic competition...Dynamic competition is better, because it allows competing technologies and new products to challenge the old ones and, if they really are better, to replace them. Static competition might lead to faster and stronger horses. Dynamic competition gives us the automobile... Then the personal-computing industry exploded, leaving older-style big-business-focused computing with a stagnant, piece of a burgeoning total market. As IBM lost market-share, many people became convinced that America had lost the ability to compete. By the mid- 1980s, such alarmism had reached from Washington all the way into the heart of Silicon Valley. But the real story was the renaissance of American business and technological leadership. In the transition from mainframes to PCs, a vast new market was created. This market was characterized by *dynamic competition* consisting of easy access and low barriers to entry. Start-ups by the dozens took on the larger established companies -- and won. ...The reason for America's victory in the computer wars of the 1980s is that dynamic competition was allowed to occur, in an area so breakneck and pell- mell that government would've had a hard time controlling it _even had it been paying attention_. The challenge for policy in the 1990s is to permit, even encourage, dynamic competition in every aspect of the cyberspace marketplace. [ The meat of the story is now unfolding. Cyberspace [ is simply a new mass communications marketplace. [ The players are telcos, fiber operators, wireless [ providers, and entrepreneurs of all flavors. [ [ Consumers play no role in this drama, their benefit [ comes when they get to choose among the commercial [ services being arranged for them. [ [ Brother "private property" who was "the [ individual" in scene one, has now become a typical [ corporate board member, dealing with mergers, [ acquisitions, new-product planning, and new forms [ of competition. [ [ Notice the explicit call for *dynamic competition* [ as being central to a good cyberspace. Watch later [ how they switch sides on this issue several times. [ [ --- [ [ Now on to the next section: THE NATURE OF FREEDOM Overseas friends of America sometimes point out that the U.S. Constitution is unique -- because it states explicitly that power resides with the people, who delegate it to the government, rather than the other way around... This idea -- central to our free society -- was the result of more than 150 years of intellectual and political ferment, from the Mayflower Compact to the U.S. Constitution, as explorers struggled to establish the terms under which they would tame a new frontier. And as America continued to explore new frontiers -- from the Northwest Territory to the Oklahoma land-rush -- it consistently returned to this fundamental principle of rights, reaffirming, time after time, that power resides with the people. [ [ Those of you with color screens probably noticed [ the red-white-and-blue background on this [ stationery. [ [ The argument has touched deep ground here. Our [ American heritage, our very duty as American [ citizens, demands that we agree that power in [ cyberspace should we reside with "the people". [ [ Fine, until you find out who "the people" [ are. Stay tuned. Cyberspace is the latest American frontier. As this and other societies make ever deeper forays into it, the proposition that ownership of this frontier resides first _with the people_ is central to achieving its true potential... [ I'm skipping four long paragraphs of fluff, to the [ effect that the struggle for freedom never ends, [ and that this generation must do its part. [ [ Next comes the second appearance of the leit-motif. [ The "evil government" character broadens out to [ represent the entire "2nd Wave" mentality. [ [ Government itself is possibly one of the 2nd Wave [ anachronisms to be left behind. [ * In a Second Wave world, it might make sense for government to insist on the right to peer into every computer by requiring that each contain a special "clipper chip." * In a Second Wave world, it might make sense for government to assume ownership over the broadcast spectrum and demand massive payments from citizens for the right to use it. * In a Second Wave world, it might make sense for government to prohibit entrepreneurs from entering new markets and providing new services. * And, in a Second Wave world, dominated by a few old-fashioned, one-way media "networks," it might even make sense for government to influence which political viewpoints would be carried over the airwaves... [ [ I just heard about the 3rd Wave last month, and [ already we're seeing a revisionist history of the [ 2nd Wave. [ [ What America have these guys been living in? We've [ encouraged entrepreneurs to enter new markets [ throughout our history, from railroad building, [ to mining, to Thomas Edison, John D. Rockefeller, [ Henry Ford, the aircraft industry, ad infinitum. [ [ I never made massive payments to the government to [ watch TV. Which planet are these guys from? [ [ But they *do* make sense if you accept the [ equation: [ "citizen" == "communications company" [ because communication companies do pay license [ fees. But those fees are nominal for corporations, [ though they might seem large to an individual. [ [ Thus they skate from one meaning of "individual" to [ the other, even in mid thought. [ [ --- [ [ The next section is called THE ESSENCE OF THE [ COMMUNITY. I'll skip most of it -- it's really [ vacuous. I'll just give you the last two paragraphs [ to illustrate the flavor of this idling segment of [ the storyline: "...But unlike the private property of today," Salin continued, "the potential variations on design and prevailing customs will explode, because many variations can be implemented cheaply in software. And the 'externalities' associated with variations can drop; what happens in one cyberspace can be kept from affecting other cyberspaces." "Cyberspaces" is a wonderful _pluralistic_ word to open more minds to the Third Wave's civilizing potential. Rather than being a centrifugal force helping to tear society apart, cyberspace can be one of the main forms of glue holding together an increasingly free and diverse society. ------------------------------------------------- [End of MC Analysis (1/2)] --- Richard K. Moore - rkmoore@iol.ie - Wexford, Ireland - fax +353 53 23970